A blog for Small Business Consultants and the vendors who serve them. It contains Opinions on business success, News in the SMB consulting space, and Information on what I'm up to.All material Copyright (c) 2006-2017 by Karl W. Palachuk unless otherwise noted.

Friday, August 31, 2007

SACRAMENTO, CA - The board of KPEnterprises announced today that they have appointed Manuel Palachuk as President of KPEnterprises Business Consulting, Inc. Palachuk will assume the responsibility for daily operations beginning immediately.

Clients of KPEnterprises will continue to enjoy the same industry-leading services they have come to expect. "This move is great for KPEnterprises and for our clients" said Nicko Demeter, Director of Operations.

Palachuk has been with KPEnterprises for three years and has served as the Service Manager for about half of that time. He has been in the Information Technology business since 1989, working as an electronics technician, a security administrator, and as a systems administrator.

Palachuk has an AAS degree in Electrical Engineering Technology and a Bachelor of Science degree in Automated Manufacturing Technology. In addition, he is a Microsoft Certified Professional and a Microsoft Small Business Specialist.

About KPEnterprises

KPEnterprises is Sacramento's premier Microsoft Certified Partner, and one of the first Microsoft Certified Small Business Specialists in the world. They provide "Outsourced I.T. Department" services in Northern California and beyond. For more information, please visit www.kpenterprises.com.

KPEnterprises has grown dramatically in recent years - doubling in size each of the last two years. Palachuk has played a significant role in the growth as Senior Technician, Project Manager, and Service Manager.

In addition to providing excellent technical support, KPEnterprises has been a key member of the technology community in Northern California for a dozen years. Among other things, KPEnterprises has partnered with other technology firms to bring the Sacramento Business Technology Seminar Series to Sacramento in 2006. For more information, please visit www.sacbiztech.com.

Every year or so we do some weeding of clients. The basic outline is pretty simple. What does our ideal client look like? And how do our current clients compare to that ideal?

One thing we've done every year (sometimes twice a year) for the last ten years: We raise the bar.

The most obvious bar is money. By the end of October, we won't have any clients who have not committed to:
- Paying at least $6,000 per year
- Prepaying for all work (monthly if on credit card, quarterly if by check)
- Remote work for almost everything

That plan is worth enough to make it worth our while to do business. At the same time, we get the client to recommit to our model for support.

If you think about it, the higher-end clients are the easiest "sell" because they are already committed at a pretty high monthly stipend. The question regarding them is: Are we making enough money on this client? If we get $50,000 in revenue but it costs us $49,000 to deliver it, that's no better than a client who brings in $1,400 in revenue and costs $400 to deliver.

So, if a high-end client is not particularly profitable, they need to agree to some adjustments. Otherwise, we'll free up all those hours to spend on clients that are more profitable.

At the low end are people who either ARE break/fix or long to be break/fix. They haven't drunk enough kool-aid. They don't believe in the system. They want more hands-on petting. Or they just think they'll save money by waiting to call you until the server's smoking.

For us, the bar is set at $500/month. That's the "silver" plan. It includes monitoring and remote maintenance, patch management, and generally keeping the server working. If clients are willing to do that, we can make money and feel that we're actually taking care of the client.

For people who say "I just want to call when something goes wrong," we can't help them any more. Because when something goes wrong, they'll want to hold us responsible. And, when something goes wrong, we'll have four technicians booked solid and working on other things. So we don't have time to do emergency repairs on some snake pit of a server that hasn't been patched in a year.

[ Sidebar: Other Consultants ]

I don't know why anyone would want that client, but plenty of people do. So our savior is the local SBS user group. If a client is good to work with and pays their bills on time, we are happy to refer them to the user group. This can result in free lunches and the occasional beer.

Of course we don't refer non-paying or pain-in-the-butt clients. We just tell them that we can't help them, but be sure to hire a small business specialist.

[ /sidebar ]

For our largest clients, there's a small reduction in price. Most of them will save about $3,000 per year starting next month. After that, the strategy will be to keep the price stable, but to offer more for the money.

In some sense, managed services is like stereo equipment. The price points will be stable going forward, but you'll get more for your money each year. For example, we now give away Exchange Defender for anyone on the Platinum plan.

Our investment in the tools of managed service -- Autotask (ConnectWise before that), Zenith (Kaseya before that), and Reflexion (Exchange Defender before that) -- is about equal to 3% of our gross revenue each year. That's significant, but it's not unreasonable, especially when the cost is spread across hundreds of users. The result is, we can roll in some serious, top-shelf services at no extra cost.

- - - - -

Enough about money.

If business were just about money, I'd probably be into offshore gambling or doggy day spas).

But life isn't about money.

And, if you're honest with yourself, business isn't all about money either.

Life and business are about enjoying what you do, working with people you enjoy, and having fun.

So aside from money, we have our employees give feedback on the people at each client office. If we love working with "those people," then we definitely want to do what it takes to keep them. If they're a pain in the neck? Well, then we'll tow the party line on negotiations.

As I was telling Dave Sobel the other day, the result is that we come up with a handful of superstar clients that we'll work very hard to keep and a handful of losers who are a pain in the ass to deal with. At the high end we'll be willing to negotiate more. At the low end, we won't offer a contract, but simply drop them.

- - - - -

Robin Robins always reminds me that I can't have a "poverty" mentality. By that she means that there's no scarcity of money or clients in the world. So don't be afraid to ask more, charge more, and set yourself above the competition. As Microsoft tells us over and over again, there are millions of small businesses. At least in Sacramento, I believe it's an expanding universe. Bottom line: it's totally okay to say goodbye to clients who don't fit your model because there are always others who do fit, and they're just waiting around the corner.

If you haven't read Erick Simpson's last book, order that today. One of his best arguments is about A, B, and C clients. Keep those A clients. Try to convert B to A. And drop the C clients.

The funny thing is that you just have to ask. "Are you willing to turn your entire computer operation over to us, no questions asked?"

Tuesday, August 28, 2007

You know how it is: From time to time you need to decide which relationships you'll cut off and which you'll cultivate.

It's hard work for several reasons.

On the vendor side, we don't just sell any product that comes down the road. We like to make a recommendation and then proceed to implement it as consistently as possible across clients. Clients look to us for advice and trust what we tell them. So if we change our advice about the kind of server they need, or the firewall, or the anti-virus, we have to take that very seriously.

We have revisited our "standard" recommendations every year or so. We make recommendations in the following standard areas:

In the last five years we have changed our recommendations in the areas of firewall, anti-spyware, and spam filtering.

We are now looking at a different operating system for the servers. And we have decided to move to a different anti-virus program.

These are major decisions. And what brings someone to these decisions?

In the case of the anti-virus, we looked at our overall relationship with vendors. The one product we sell that costs us the most time to sell, implement, and troubleshoot is Symantec Anti-Virus. Because of the (high) quality of the product, we have put up with an aweful lot of crap. But at the end of the day, we need to do business with companies that want to do business with us.

While Symantec's reseller program has been refreshed a few times, it's not one you'd describe as "friendly." And technical support has never been what it should be.

So after many years (six?) of favoring Symantec for anti-virus, we are making a move to Trend. We expect this move to help us make more money over the next several years than we would make with Symantec.

As for server operating systems: We are going to be more judicious about recommending Small Business Server simply because a client has 50 or fewer users. Given the fact that Microsoft has no real first-tier technical support available for SBS, we will determine which features are really needed for a client, and how many applications they need to run on the server.

Simplicity's the key to success. Exchange, sharepoint, file sharing, and remote web workplace may be all we ever use on the SBS box.

But most clients still don't use Sharepoint. And hosted Exchange can make the need for an in-house exchange server irrelevant.

So, if the client has several line of business applications, or two or three SQL databases, then we'll definitely not put them on SBS.

It's possible that we'll buy one big beefy box and put two standard servers in virtual machines. This will cost the average client about $1,000 more up front. But if each physical server has one "incident" in any three-year period, this money will be earned back by not having the downtime associated with incompetent first-line support.

When the client's on the hook for the cost, we believe using SBS only in simple environments will save them money in the long run (three year cycle). When we're on the hook for the cost, we know there's less cost to support Server 2003 than SBS. We assume 2008 will be the same.

-----

The bottom line is: Symantec might be a superior product to Trend, but both are well above the bar of acceptability. We're going with the one that helps us make more money.

Similarly, SBS is absolutely the superior product for small business when everything goes right. But when something goes wrong, the support line that can actually help you is over at Windows Server, not SBS.

Friday, August 17, 2007

I used to have a client named Russ. He owned a little store front. He had one computer and called when something went screwy.

As I worked on his machine, he'd always huddle right in there with me and try to learn. But he didn't want to learn too much. When it was all fixed, he would want to know click-by-click how to make something work. But if I tried to explain that the VPN can't route between two LANs with the same IP range, he'd hold up his hand and say "Russell don't need to know."

He always drew the line very clearly. There was stuff Russell needed to know and stuff Russell didn't need to know.

I recently exchanged some information with Amy over at Mobi-Tech.

The topic was "information." How much information does the client want/need? A related topic would be what does the client deserve and what should they expect?

We both provide "Network Documentation Binders" of course. But what information gets stored at client's site and what gets stored at the consultant's site?

Remember: The client has no motivation to understand you because you're here and you're taking care of things.

The only time the client needs to know this information is when you're not here or when you're not taking care of things. That's when the client needs the network documentation binder. Where else would they look for the data?

You say: "In the !tech directory of the root of the first drive on the domain controller, Bob."

Of course I believe you need awesome documentation. But most clients are intimidated by it. They will only open it if they have to. Or, more likely, they'll have someoone else open it when you get hit by a bus.

Basically, clients need to know how to get ahold of you, and how to change passwords if they fire you.

The electronic answer is to store all this information in some kind of database such as Autotask. But remember that Autotask (or whatever) is your tool and not your client's tool. If all of your configuration data is on your system, then the client doesn't have it. So when you get hit by a bus, the client still doesn't have it.

We keep all information in the Network Documentation Binder. It lives with the client, the client owns it, and our job is to keep it up to date. I always say in presentations: The client owns this information. They own the server and the software; they own the router and the firewall; they even own the wires inside the walls. For goodness sake, give them their own passwords!

Here's what we keep in our systems: the bare minimum needed to do remote assistance.

We keep domain registration information in our system so we can reroute traffic as needed if a server goes down, company moves, etc. Great for changing ISPs.

We keep "device" configs such as router, spam device, firewall.

We keep a list of event times (when does backup go off, when does mailbox management happen, when are shadow copies made, when are virus scans scheduled?).

And, of course, we keep some key passwords (not all passwords).

Other documentation is either in paper format at the client's office, or in electronic format in the c:\!tech directory on the client's primary server. But 99% of it is in the paper format.

When the building starts to flood, the paper binder is all they need to take with them.

Every year we make a photocopy of that binder and it goes offsite with the client's backup tapes.

Key to success:One of the most important things about usable documentation is to only document what you'll really use. So, we'll fill out the machine spec sheets in the binder, but we don't enter all that crap in Autotask. We can generate reports in Zenith that give us all the details instantly. All we need remotely is enough info to get into the system.

As for clients, I've heard from some partners that they put all my forms on each client's machine, update them there, and then print off a copy for the binder. I'm not sure how much that actually gets done when you have more than five clients. Real world experience tells me that that's more of an ideal than a reality.

Tuesday, August 14, 2007

Either you control these vendors or they control your server. Pick one.

Here's the background:

A vendor we'll call Schmuck and Putz, LLC has built a business critical application on .Net 1.1.

So client has problems with server. While consultant is trying to rebuild and make everything work, Schmuck (owner of Schmuck and Putz, LLC) uninstalls .NET 2.0 and installs 1.1 cuz his stuff only runs on 1.1.

We go round and round. We explain that 3.0 has been released and Microsoft shows no sign of abandoning the technology, so there will probably be upgrades beyond that.

We communicate to all involved that Business Critical Software needs to join the 21st Century. If not, then this server can't be on managed services unless this application is moved to a different server. Our general advice is that Schmuck should upgrade his business critical application.

Then we get this communication:

According to our engineers, .NET 2.0 is an extreme change and we do not anticipate supporting it. To make this change, the entire code set will require changing. Also, every one of our clients would require an update to .NET 2.0. . . . The major concern is that with Vista, now, and Longhorn on the horizon, we are waiting to see what changes lie in the future for Microsoft's Component services. So, for now, we are continuing to use Microsoft .NET Framework 1.1.

Uhhhhhhh.

OK.

And you write software for a living?

Did I mention that this product costs client THOUSANDS of dollars a month?

It is beyond my comprehension that these people are out there taking other peoples' money. But it happens every day in every line of business.

Businesses are literally crippled by their commitments to business critical applications that are written by amateur hacks and never upgraded because they don't want to learn the latest tools and techniques.

We've all seen it: One application will only print in a DOS box to a mapped printer on LPT1. Another only works on NT 4.0. Thank God it wasn't 3.51! Some require hard coded shares because . . . that's how the writer figured out how to make it work. And they all have to run as administrator so Mr. Schmuck doesn't have to figure out the security implications of his code.

Truth be told, some of these amateur hacks do some cool stuff.

But a software development business should have a never-ending process of updating their software to keep up with the changing technology. Microsoft WILL replace Longhorn with something else. They will replace Vista. They will replace C# and .Net and every other thing in their basket of goods.

-----

Lessons for SMB Consultants:

If you can get in on the decision process, help your client find products based on standard technologies, with a track record of updating their stuff.

If you come in after the fact, get permission to manage this relationship, then force the application vendor to start practicing modern, standard business practices.

Learn what you can about this line of applications and be prepared to make recommendations about alternatives.

Make it very clear to the client that the current system is costing real money. Keep in mind that they have paid tens -- or hundreds -- of thousands of dollars over the years. Moving to a new, modern, well-written, program with a future will be expensive.

Your job is not to save the client pennies today. Your job is to help the client make the correct long-term decisions down the road. What's in the client's best interest over 3 or 5 years?

Your role is Trusted, Educated Advisor. Not "computer guy/computer gal."

Consider the lifetime value of this client. Three years from now, you want this client to look back and say "I'm sure glad we took your advice." You don't want to hear "Why didn't you warn us about this? That's what we pay you for. We rely on you to help us make these decisions. We still printing in a DOS box!"

Thursday, August 09, 2007

What am I going to say? "Sorry, Dan. You can't really run that practice exam for the 70-282 exam because I have to fiddle with a blog post while the wife sleeps?"

I have come to the absolute conclusion that I'm far more tethered to technology than I've wanted to admit. I turn off my cell phone and forget to turn it back on. "Friends" give me a hard time because all my phone does is make phone calls. [In my defense, my phone works in every country on earth, so I can just open it up when I get off the plane and you will never know what continent I'm on. So I don't care if I can't play solitaire and edit word files on 1x2" screen from eastern europe.]

Anyway.

Without a laptop, my monthly client newsletter's going out late.

Without a laptop, I had to drive to the office to get stuff for the webinar I did today.

Without a laptop, I haven't posted to the RFSblog.com as I should have.

Without a laptop, I haven't posted to the smallbizthoughts blog as I should have.

Without a laptop, I haven't polished the Project management book I'm supposed to be releasing next month.

I'm getting nervous and my skin is beginning to itch.

I don't need a cell phone.

I don't need a pocket PC.

I don't need a crackberry.

But I DO need a tool that allows me to indulge my nervous habit and write stuff 24x7.

It is rare that I'm awake at 11 PM. But I don't have a laptop. :-( So I've been doodling notes to myself.

-----

We had a client order five laptops today. I reviewed the quote and told Charlie: "Order six. I gotta have a laptop."

Tuesday, August 07, 2007

I've gotten a lot of requests for info regarding the practical how-to side of doing Hardware as a Service (HaaS).

We are pleased to announce that we've got a white paper (and more) on doing HaaS.

Sidebar: HaaS

Hardware as a Service is the next evolutionary step in Managed Services. Quite simply, HaaS involves packaging all the

- Hardware - Software - and Managed Services

into one low monthly payment.

The goal is to provide for your clients a simple and reasonably priced way to get all of their technical support with no questions asked. For you, the consultant, it is a way to improve cash flow, provide an ongoing stream of income, and provide a higher level of service.

If you haven't been selling hardware or providing managed services in the past, then this might be very new to you. If you do sell hardware and managed services, then HaaS is really just the next logical step.

We've also put together a free outline of a HaaS agreement so you can write a full agreement for your company. We are not distributing the full agreement we're using because 1) it's a combination of various other contracts we've canibalized, so it's not all original info, and 2) We paid a lot of money to have the lawyer look it over and give her blessing.

Anyway, you can download the free outline and see whether it's useful for you. It is basically a paragraph-by-paragraph description of what you agreement should contain.

Now before you stard clicking wildly, there is a price for the white paper. After all the work I and my company put into developing a HaaS model that works, we decided that a low, nominal fee would separate those who are interested and those who are not.

We Donate with Every Sale!

Translate

Managed Services on Amazon

Hot Books for Managed Services

This four-volume set is the definitive guide to Managed Services. From the front office to the tech department, we cover it all. Every computer consultant, every managed service provider, every technical consulting company - every successful business - needs SOPs!

When you document your processes and procedures, you design a way for your company to have repeatable success. And as you fine-tune those processes and procedures, you become more successful, more efficient, and more profitable. The way you do everything is your brand.

How to Deliver Successful, Profitable Projects on Time with Your Small Business Clients

Small Business project management is simply not as complicated as project management in the enterprise. But small business projects have the same challenges as enterprise projects: They need to achieve their goals effectively, on time, and within budget.

They also face the same primary challenge – staying inside the scope of the project!

This great little book provides a simple process project planning and management process that is easy to learn and easy to teach to your employees, fellow technicians, and sub-contractors. You’ll learn to track any project, explain all the stages to clients and employees, and verify that everything is completed on time and under budget.

The authors show you a great technique for making sure that scope creep is a thing of the past! Make every project a successful and profitable project!

DNS and DHCP - On the Server or The Firewall? A few years ago, one of the major "truths" about our business changed. It had lo...

FTC Disclosure Statement

I make every attempt to honestly state what I believe and enjoy the freedom of posting whatever I feel like on this blog. This is a big complicated world and I have many interconnected personal and professional relationships.

I may in some way receive money or other benefits from any of the products, services, or companies mentioned in this blog as a direct or indirect result of my actions on and off this blog. Any experience mentioned here is just my experience and I have no knowledge about whether it represents a typical experience with any products, services, or companies mentioned.

Whenever it is possible to have both an honest and a misleading interpretation of my statements, please assume honesty. Thanks. - karlp